Pricing professionals have many tools in their toolboxes, but in this article, the author reminds pricers to not underestimate the power of storytelling in pricing projects. Shepherding a management decision can be difficult. Without a story that goes beyond presenting pricing analysis and clearly communicates the results of the analysis, it is nearly impossible.
Pricing professionals are most often hired to accomplish a singular goal: improve profits. But how do measure the impact of pricing initiatives on profitability? In this article, the author provides an explanation of how a profit bridge with proper attribution can be used to both guide pricing efforts and measure pricing performance.
Stephan M. Liozu is Chief Value Officer of the Thales Group (www.thalesgroup.com). He is also an Adjunct Professor & Research Fellow at the Case Western Research University Weatherhead School of Management. He holds a Ph.D. in Management from Case Western Reserve University (2013), is a Certified Pricing Professional (CPP), a Prosci® certified Change Manager, and a Strategyzer Business Model Innovation Coach. He authored three books, Dollarizing Differentiation Value (2016), The Pricing Journey (2015) and Pricing and Human Capital (2015). He sits on the Advisory Board of LeveragePoint Innovation and of the Professional Pricing Society. He is a Strategic Advisor to 360pi, The Kini Group, and PriceSenz. He can be reached at sliozu@gmail.com.
In this article, the author digs deeper into average selling prices to identify opportunities to improve revenues and profits. He also presents a pricing case study in which ASPs were analyzed by a building materials company, which aimed to improve the impact of its pricing as well as the return on investment of a pricing function and appropriate pricing tools.